Legislature(2003 - 2004)
05/17/2003 10:15 AM Senate JUD
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* first hearing in first committee of referral
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+ teleconferenced
= bill was previously heard/scheduled
CSSSHB 86(JUD)am -INJUNCTIONS AGAINST PERMITTED PROJECTS
CHAIR SEEKINS reminded members they were contemplating Amendment
1 during the last discussion on CSSSHB 86(JUD)am.
SENATOR THERRIAULT moved to withdraw Amendment 1 and replace it
with corrected language.
CHAIR SEEKINS announced that without objection, Amendment 1 was
withdrawn.
SENATOR THERRIAULT moved to adopt Amendment 2. He explained to
members that he received a memo from legislative counsel who
expressed a few areas of concern. Amendment 2 contains
modifications that will address those concerns. The first
concern was about the separation of power between the
legislative and executive branches. To address that, language on
page 3, lines 9 and 10 has been removed. The second change is
to line 13 [page 3] where language was inserted to clarify that
an individual's right to challenge the activity will not be cut
off. He pointed out the counsel's concern was whether the courts
would always grant an individual citizen's constitutional
rights, despite what the Legislature did in statute.
SENATOR OGAN expressed confusion and asked if the bracketed
language on line 11 would remain in the legislation with
additional language added to it. He noted when language is
bracketed in a bill that usually signifies it is to be deleted.
CHAIR SEEKINS asked members if they had any objection to
rewriting Amendment 2 by removing the bracket at the beginning
of line 11 and the bracket after the word "review" on line 13,
and adding the phrase, "unless it is a claim based on the United
States Constitution or the Constitution of the State of Alaska"
for the purpose of clarity.
SENATOR OGAN agreed those changes will eliminate further
confusion. [No members objected.]
REPRESENTATIVE FATE asked if Section 3 had been deleted.
CHAIR SEEKINS said it was not.
SENATOR THERRIAULT noted that he provided information to address
Senator French's concerns.
SENATOR FRENCH referred to a document entitled, Oil and Gas
Projects in Cook Inlet, and noted it lists six projects. He
asked where the Osprey project by Forest Oil company falls in
that list.
SENATOR THERRIAULT indicated it would fall in the Redoubt unit.
SENATOR FRENCH asked if that is the only unit that has been
involved in 10 years of litigation.
CHAIR SEEKINS said he would not say the Redoubt unit is the only
one with a problematic process, but, "...it is the one ... we
have used as an example of the problem that exists."
MR. KYLE PARKER, general counsel, Forest Oil Company, told
members the project that Forest Oil spoke of yesterday that has
undergone 10 years of litigation dates back to the lease sale in
1978. He clarified that during that 10 year time period,
additional litigation over Cook Inlet lease sales has occurred,
but that litigation was not reflected in the chronology
presented to the committee. Other litigation regarding listing
the beluga whale as an endangered species also transpired. He
said some people would suggest that all of that litigation has
been geared toward stopping oil and gas development in Cook
Inlet.
SENATOR FRENCH said he was trying to set up a clear distinction
between this project and other projects in the Cook Inlet area.
He said an example of a project that is going forward without
too much difficulty is Conoco Phillips' Cosmopolitan exploration
drilling in the southern part of the [Kenai] Peninsula.
MR. PARKER said an important distinction between the
Cosmopolitan and Redoubt projects is that the Cosmopolitan
project is being drilled from shore. The Redoubt project brought
the first new exploration and development platform into the Cook
Inlet since the early 1980s. If the state is going to see
additional oil and gas development in Cook Inlet, additional
exploration and development platforms will have to be brought
into the Inlet. The offshore platforms appear to be the focus of
the litigation by the environmental groups.
SENATOR FRENCH maintained that is the beauty of waiting for
better technology and said the horizontal drilling that will be
used on the Cosmopolitan well is astounding. He noted Conoco
Phillips would be drilling several miles into the Inlet from on
shore.
CHAIR SEEKINS pointed out the permits that have been issued for
the Cosmopolitan project and the Redoubt project would be
grandfathered in under this legislation. He believes it is
incorrect to say this legislation is specific to any project
because it is not specific to Cook Inlet.
SENATOR FRENCH said he would feel far more comfortable dealing
with a clean copy of Amendment 2. He noted the legislation will
make a big change to the way Cook Inlet permits will be
addressed: it will freeze the permits in place and give them
legislative blessing. He said he would like to hear from
everyone who will be affected by this legislation, such as
fishermen. He said he shares the concern of other legislators
about passing legislation in the closing weeks of the session.
SENATOR THERRIAULT apologized for presenting an amendment that
had markings on it, but said it is clear. With regard to the
previous action [on SJR 19], the Senate was asked to take action
on a constitutional amendment that was introduced a few weeks
ago. He noted there is a big difference between a constitutional
amendment and a statute.
CHAIR SEEKINS said he has great faith in Senator French's
ability to understand Amendment 2.
SENATOR ELLIS indicated the adoption of this amendment and
passage of this legislation would end one court case. He said he
is unclear about which other court cases will cease as a result
of this legislation.
CHAIR SEEKINS said he has no idea and that he has not considered
that in this matter. He considers CSSSHB 86(JUD) am to be good
legislation.
MR. JOE BALASH, staff to Senator Therriault, said the language
in Section 1 of Amendment 2 deals with all authorizations and
permits up until the effective date of the law. He explained:
And as we move through whatever period of time there
will be between today and passage of the bill and
then, finally, being signed into law, it will then be
another 90 days before the new law is effective, which
would be new bill section 3 on page 2. So, in that
intervening time, there will be multiple permits and
authorizations issued, which will be subject to the
possibility of litigation throughout the summer and so
if we did not have sort of this forward looking
ability to say that there will not be an opportunity
beyond these sets of circumstances, we could wind up
with a very awkward situation with kind of a weird
window in the middle that doesn't accomplish what
we're setting out to do here. And so the potential is
there for additional projects to be litigated and so
we want to protect those additional projects, which
are the ones cited on this first page here on the
various exploration units and development units.
SENATOR THERRIAULT said he wants to make sure everyone
understands that getting a permit will still require applicants
to undergo a lengthy process and a project must adhere to the
requirements of the permit. He added:
We have given specific standing to the applicant in
case they're turned down - they can appeal. The
affected coastal resource district, which is the
entity that creates and shapes the local enforceable
policies - that's where areas of extra sensitivity in
a community - we allow the community to direct extra
attention, extra protection for those areas, that's
the coastal district. And individual Alaskans - we've
clarified to make sure that everybody understands
their right to due process - constitutional right - is
not in anyway abridged by this. I just want to make
sure that everybody understands we're not changing the
permit process. We're just saying when you get to the
end of the permit process, you're allowed to go
forward with your project.
SENATOR OGAN said when he first read this bill, he discussed
with legislative counsel his concern that due process be
provided. He said his concern was addressed. Amendment 2 will
limit who has standing. The affected coastal resource district
will be the place for due process for people who have problems.
If people feel their due process rights are compromised on a
constitutional basis by this legislation, they have standing to
challenge that. He said although this legislation deals with one
project involved in litigation, it also deals with all projects
on a broad regional basis.
MR. SCOTT NORDSTRAND, Deputy Attorney General for the Civil
Division of the Department of Law, told members he provided the
committee with a letter describing the department's concerns. He
said the committee should be aware the ongoing litigation has a
cost to the state as well as to Forest Oil Company. The state
has incurred about $300,000 in legal fees, either internally or
paid to the Trustees of Alaska.
SENATOR FRENCH referred to Section 3 of Amendment 2, on page 2,
and asked if that is specific to the Cook Inlet area or whether
it will be applicable to any coastal program.
MR. NORDSTRAND said the Department of Law has not undertaken a
formal review of Amendment 2 but he sees nothing in it to
suggest it is specific to Cook Inlet.
SENATOR FRENCH asked if the amendment makes a statewide change
to the Coastal Zone Management Plan.
SENATOR THERRIAULT explained the coastal zone management system
still operates the way it was set up: permit review, consistency
determination, and the ability to elevate decisions by permit
writers. However, [the amendment] will provide that when an
applicant comes out with a permit in hand, the applicant can
move forward and will not be subject to litigation unless the
litigation is a constitutional matter, or the applicant or
coastal resource district has specific standing.
SENATOR FRENCH asked if it would apply statewide.
SENATOR THERRIAULT affirmed that it would.
11:42 a.m.
SENATOR OGAN said he believes the intent of Amendment 2 is to
provide a linear process for people investing in Alaska. He said
he learned during his first year as a legislator that companies
do not mind having to jump through hoops during the application
process, but they need to know that when they've jumped through
"hoop Z," they do not have to go back to "hoop A." He said that
costs time and money and this state has driven away business
because it does not have a linear process.
CHAIR SEEKINS said he believes the public process is protected
with this legislation. He said once the public process is
completed and a permit has been issued, the cost of litigation
is not in the best interest of the State of Alaska in terms of
income, revenue, jobs, or local tax revenue. This legislation
will provide a point of finality in the permit process.
SENATOR FRENCH said he is aware the Legislature recently adopted
a fairly comprehensive change to the Coastal Zone Management
Plan; HB 191 is en route to the Governor for his signature. His
understanding is that law has its own subsection (i). He said it
is possible the legislature is sending two bills to the Governor
with identical language and he questioned the result.
MR. BALASH replied:
Unlikely as it may seem, the Governor has the ability
to veto HB 191, in which case we would need - the very
next section in statute - or subsection would be (i).
So, I think if you looked at 46.40.096 in HB 191, the
very first piece of that section of statute that's
been added is subsection (i). They both start with a
new (i). But in our revisor's powers, over in
[Legislative Legal and Research Services], they take a
look at all of the legislation passed and enacted
through the course of a session and the revisor is
given specific statutory authority to place the
sections and subsections where they belong in relation
to one another. And so, I'm not sure what the final
subsection was in 191. I think it went out to (q) or
(r) so this would then be the next letter in the
alphabet.
SENATOR THERRIAULT agreed that the legislative system
anticipates the need to mesh multiple laws together. He noted
that the Senate had a fairly good debate on HB 191. Its big
impact will be that the local enforceable policies will have to
meet some standards so that contractors are not confronted with
vague statements that do not describe what activity is entailed.
CHAIR SEEKINS noted that objection to the adoption of Amendment
2 was maintained. After a roll call vote was taken, he announced
that the motion carried with Senators Ogan, Therriault and
Seekins in favor, and Senators French and Ellis opposed.
SENATOR THERRIAULT moved SCS CSSSHB 86(JUD) from committee with
individual recommendations and its attached fiscal notes.
SENATOR FRENCH objected. He said he is still concerned with
language on the first page of Amendment 2, lines 7 and 8, which
basically says the legislature is putting its blessing on all
oil and gas projects that had, as of the effective date of this
act, a final authorization permit or other form of approval. He
expressed discomfort with the "other form of approval" phrase,
as it is vague and indeterminate.
He moved to strike "other form of approval" from lines 7 and 8
on page 1 of Amendment 2.
CHAIR SEEKINS noted that a motion was already on the floor.
SENATOR ELLIS asked if the sponsor of the motion would be
willing to withdraw his amendment to allow Senator French's
motion to be addressed.
SENATOR THERRIAULT agreed to do so and withdrew his motion.
SENATOR FRENCH made a motion to amend Amendment 2 of SCS CSSSHB
86(JUD) by striking the words, "or other form of approval" from
lines 7 and 8. He noted the punctuation would have to be cleaned
up and the word "or" would have to be inserted between
"authorization" and "permit."
SENATOR THERRIAULT objected and asked that Mr. Parker or the
former director of the Division of Oil and Gas provide an
example. He pointed out that the Legislature controls the
statutes that grant the approvals and permits.
MR. JIM EASON, former director for the Division of Oil and Gas,
Department of Natural Resources, and currently representing
Forest Oil Company, told members that other authorizations do
exist, one being best interest findings, another being letters
of non-objection for activities considered to be minimal, such
as collecting rock samples with a rock hammer.
SENATOR THERRIAULT maintained his objection to amending SCS
CSSSHB 86(JUD).
CHAIR SEEKINS called for a roll call vote. The motion to amend
Amendment 2 failed with Senators Ellis and French voting yes and
Senators Ogan, Therriault and Seekins voting no.
SENATOR THERRIAULT moved to pass SCS CSSSHB 86(JUD) from
committee with individual recommendations.
SENATOR ELLIS objected.
CHAIR SEEKINS called for a roll call vote and announced the
motion carried with Senators Ogan, Therriault, and Seekins in
favor, and Senators French and Ellis opposed. SCS CSSSHB 86(JUD)
moved from committee.
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